Every organization wants to give new hires a great onboarding experience, but will investing in an employee onboarding solution really improve the bottom line?
We’ve compiled the facts and data to help HR leaders understand the ROI components of an onboarding solution, and how it translates into financial impacts on their business.
Understanding The Big Factors
Presenting an ROI driven cost/ benefit analysis to the CFO can be a complex undertaking, but it’s essential that HR leaders build a strong business case. The biggest obstacle many teams face is an unclear framework of how to assess ROI.
Not only can onboarding ROI be incredibly subjective, but it’s also time consuming when you’re already stretched.
While some things are easy to measure in recruitment and ongoing employee costs (i.e. job postings, salaries, employee benefits), other things are more difficult to track.
Specifically, it’s often difficult to attribute the time invested by HR and People departments in preparing for new employees and managing onboarding workflows and compliance costs.
And that’s before we begin to assess the ROI of ramp-up time for new employee proficiency, benefits of early employee engagement, and the broader influence on employee culture and team success.
The Five Key Pillars of Onboarding ROI
Sapling believes that there are five key pillars on Employee Onboarding ROI.
1. Automate Tasks, Emails and Reminders
Automating the manual, repetitive tasks with sophisticated workflow management within an onboarding solution reduces HR team overhead, driving efficiency across the organization and allowing your team to focus on what they do best: people, not process.
2. Increase Productivity
Ensuring the investment made in recruiting new hires is realized as soon as possible. Effective onboarding minimizes the time it takes to get new-hires settled, fully engaged and ramped to proficiency. Employees typically take 8 months to reach full productivity.
3. Decrease Turnover
First impressions are critical. A structured onboarding program validates the candidate decision, supports early engagement, reduces the risk of employee turnover by 58%, and saves the recruitment and time costs associated with continually replacing talent.
4. Enhance Culture
Organizations with great culture enjoy significant benefits versus industry peers, including higher employee engagement, lower turnover and better financial performance.
5. Support Compliance
A sophisticated onboarding solution ensures all regulatory requirements are completed with e-signature capabilities. This enables employment contracts and company policies to be correctly signed and digitally stored.
What is the ROI of an Onboarding Solution?
Sapling's research puts the ROI at $6,044 - $11,799 per new employee onboarded, with the biggest impacts being in productivity, culture and retention.
Importantly, employee onboarding solutions can help you run an onboarding experience on auto-pilot to optimize your team’s time, minimize errors, enhance compliance, remind people of uncompleted tasks, and avoid missed deadlines.
This is all while ramping up new employee productivity and engagement, as effective employee onboarding promotes and encourages new hires to hit the ground running and limit anxiety, fear and ramp-up time.
Best yet, it’s a virtuous cycle - giving new employees a great onboarding experience supports a culture of employees willing to offer the same courtesy to those who come into the organization after them.
How Can Sapling Help?
The hidden costs of inefficient employee onboarding can quickly add up.
Sapling tackles all of these problems head-on with an onboarding solution that allows you to deliver a simple, intuitive and consistent employee experience.
The ROI on effective employee onboarding can’t be understated - and its mission critical to integrate this into your People Management plan to build sustainable and scalable employee success.
At the end of the day, onboarding ROI metrics based on HR time should help inform your decisions, but it’s up to you and your leadership to determine the true value on the broader organization of an improved onboarding process.
Interested to learn more about how onboarding can help you build better connected, more engaged, and higher performing teams?
Download the Sapling Guide to Employee Onboarding Success or signup for a free product tour today.